Cambodia and the International Monetary Fund

Cambodia and the International Monetary Fund

Cambodia officially joined the IMF in December 31^st, 1969. After years of internal and external strife, the Cambodian government is currently focusing its attention to rebuilding and renovating the national economy through grants and loans from multilateral sources like the International Monetary Fund. In March of 1994, the International Committee for the Reconstruction of Cambodia (ICORC) developed a comprehensive plan in effort to support Washington Consensus policy prescriptions. These reforms aimed to shift the economy from a socialist state-controlled economy towards a capitalistic market-controlled one. Since then they’ve had a total of two arrangements addressing fiscal management. Directors approved a loan for SDR 28.0 million (about $41 million) in support of Cambodia’s 1995-96 macroeconomic and structural reformations. In 1997 domestic political uncertainty’s following an alleged coup d’état halted IMF disbursements but resumed again in 1998 after the formation of a new government.

History

In order to gain global economic recognition from the International Monetary Fund, Cambodia was required to make fiscal structural reforms that mimic the mechanisms of a liberal-market economy. With that said, Democracy in Cambodia has little to no legitimacy in its economy. Following independence from French colonization in 1954, Cambodia has undergone four major economic and political changes. Firstly, the abdication of the constitutional monarchy in 1955 by Sihanouk established Cambodia as a Socialist state. Then Sihanouk was overthrown by the Lon Nol dictatorship who was supported by the United States. Subsequent to the Vietnam war, President Nixon secretly bombed Cambodia. This bombing invigorated the formally small communist party the Khmer Rouge and as a result the Cambodian Civil war and Genocide began. The organization ultimately oust Lon Nol and formally established Cambodia as a self-contained communist country. Pol Pot, the Khmer Rouge leader, systemically implemented inhumane and anti-democratic policies which abolished money, private property, emptied cities and killed approximately 2 million Cambodian citizens. The communist parties goal was to reinstate Cambodia's "golden age" before colonization, and United States imperialism; the time of the Ancient Khmer Empire which ruled South-East Asia and heavily relied on the agricultural sector. By December 1978, Cambodia was invaded by Vietnam who implemented the new leader of the People's Republic of Kampuchea, Hun Sen, a former Khmer Rouge commander. Guerrilla warfare still ensued and as a result Cambodia suffered international economic isolation. In the 1990's the United Nations convened a Paris Conference to restore peace to the war torn country.